Ezra on the FairTax
January 17th, 2008 by Peter SudermanEzra Klein and I disagree on a great many things (though we found much to talk about in our recent Bloggingheads.tv discussion). But one thing we can agree on is that the FairTax is a terrible, terrible idea. His column on the FairTax is up at The American Prospect today, and it’s well worth a read.
January 17th, 2008 at 5:43 pm
That was a good read, thanks for the link Mr Suderman. The article delivers one devastating blow unique to the fair tax: Evasion.
I am from a country that uses almost all forms of taxing: VAT(16%), tax to financial transactions (0.4%), flat tax for professionals (10%) and corporations (35%), and a progressive one for individual income (from 0 to 35%).
And I can tell you that only suckers pay the VAT there. Pretty much every transaction is done in cash to avoid leaving a trail, checks are barely used for the same reason. And stores always offer a nice discount of 16% if you pay with cash. Corporations and other enterprises use a multi-tiered accounting system often refered as to A, B accounting where the “A” company data reflects the VAT, and where B data is the real thing, suffice to say that accounting software from the US does not even sell there because it fails to accomadate that reality.
One of the most laughgable rationales for the fair tax is that it will finally bring the underground economy to the legit one. Yeah right, the opposite will happen. If people avoid the tax at 16% imagine what will happen here if it gets enacted at the proposed 30% rate (if not more).
Another interesting thing from the article and I wonder if you are aware of it Peter, is that the rest of the objections from Ezra, apply equally well to the flat tax proposal from Armey. Does that mean that you oppose a flat tax too ?
January 17th, 2008 at 6:50 pm
Why I Like Fred: http://www.realclearpolitics.com/articles/2008/01/why_i_like_fred.html
That’s a good read, and Fred Thompson is for the Optional Flat Tax.
January 17th, 2008 at 10:25 pm
Of course they don’t oppose the flat tax…this is basically Dick Armey’s website! All they do here is cheer whenever that guy farts. They oppose Huckabee here…that’s the important point to remember…
January 18th, 2008 at 1:26 pm
To be fair, Mr. Guy, these folks have always opposed the Fair Tax, advocating the Flat Tax instead. I think the prejudices you see here are those of the individual bloggers, to be honest. Some seem to support Thompson while others are in Romney’s camp. Regardless, I would expect FreedomWorks to oppose Huck just based on their differing ideology, and don’t see anything particularly insidious about that.